A bankruptcy case filed under Chapter 13 is often called a reorganization. A Chapter 13 bankruptcy case works differently than a Chapter 7 case, in that it provides you with the opportunity to pay back unsecured debt over a 3-5 year period, without having to liquidate assets like your house or car.
A Chapter 13 bankruptcy repayment plan has to meet certain requirements and be approved by the Bankruptcy Court. Payments under the plan are then distributed to your creditors by the court-appointed trustee – you pay them and they pay the creditors. Your creditors will no longer be allowed to contact you – provided you continue to meet the requirements of the repayment plan.
Just like Chapter 7, filing a Chapter 13 bankruptcy petition provides relief from creditor harassment, garnishments, tax liens, and repossessions. While you do have to make payments on your debts and currently have a stable income to qualify for Chapter 13 bankruptcy, the total amount you’re required to pay back can often be substantially reduced by the Bankruptcy Court. Along with this benefit, the court allows you to keep all of your assets.
A Chapter 13 filing also automatically stops foreclosure proceedings. Don’t wait if you think your home is in danger of foreclosure – as long as you file before the lender completes the foreclosure proceeding, you can be allowed to catch up past due mortgage payments over time and stay in your home.
Chapter 13 could help me with my bills – what do I do next?
Contact us using the form on the left, or give us a call at our Houma, Metairie or La Place offices. Bring all your debt, income, and asset information to our initial meeting, and we’ll take a look at what Chapter 13 bankruptcy can do for you.
After you have chosen us to help you with your bankruptcy, we will get your petition filed and help you take care of the necessary paperwork. You’ll need to bring your most recent tax records, and we will recommend reputable credit counselors for you.